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DECREE No. 170/2004/ND-CP OF SEPTEMBER 22, 2004 ON ARRANGEMENT, RENEWAL AND DEVELOPMENT OF STATE-OWNED FARMS

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 26, 2003 Land Law;

Pursuant to the November 26, 2003 State Enterprise Law;

At the proposal of the Agriculture and Rural Development Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Regulation scope and application subjects

1. This Decree prescribes the arrangement of, renewal of organization, management mechanisms and policies for, State-owned farms.

2. This Decree applies to State-owned farms, State-owned agricultural enterprises (hereinafter collectively referred to as State-owned farms), which have been assigned or leased land by competent State bodies for agricultural production as their principal purpose.

Article 2.- Objectives of arrangement and renewal of State-owned farms

1. To sustainably and efficiently use the existing land and material and technical foundations of State-owned farms.

2. To raise production and business efficiency and competitiveness of State-owned farms; to form concentrated agricultural goods production areas in close association with processing and outlets.

3. To create more jobs, increase incomes for laborers, contribute to socio-economic development, hunger eradication and poverty reduction, and assurance of security and defense in localities.

Article 3.- Principles for arrangement and renewal of State-owned farms

1. Arrangement and renewal of State-owned farms must be associated with local socio-economic development as well as agricultural production plannings and plans.

2. Arrangement and renewal of State-owned farms must guarantee the clear distinction between production and business tasks and public-utility tasks.

a/ Farms which perform business tasks as their major tasks shall shift to wholly engage in production and business activities and practice business cost-accounting according to the market mechanism.

b/ Farms which shift to do business but still have to partly perform the social and security and defense functions shall enjoy appropriate support policies of the State.

c/ Farms which are assigned public-utility tasks as their major tasks shall operate under the provisions of Article 19 of the State Enterprise Law.

Chapter II

ARRANGEMENT OF STATE-OWNED FARMS

Article 4.- Transformation of State-owned farms

1. State-owned farms which perform the production and business task of specializing in the cultivation of perennial trees, have relatively adequate infrastructure, do business at a profit or are self-financed shall be further consolidated to raise their efficiency on the basis of investing in the intensive cultivation of tree gardens already planted as well as in the renovation, upgrading and expansion of existing processing establishments or the building of new ones along the direction of mobilizing organizations and individuals inside and outside the farms to buy shares; shall only expand new cultivated areas under truly efficient projects. Their unused or inefficiently used land areas shall be recovered by local administrations for use according to the provisions of land legislation.

2. Farms which are tasked to produce, and trade in, annual trees and rear animals and have assigned these jobs to laborers under stable and long-term contracts; form large-scale, concentrated goods production zones, supply raw materials for processing and agricultural goods for export, do business at a profit or are self-financed shall be further consolidated, re-organize their production, act as key suppliers of plant and animal seeds, build models of application and transfer of technical advances, development of processing and purchase of farm products for local farmers.

3. Farms which produce annual trees and rear animals, have no processing establishments, conduct inefficient production and business activities, and have contracted their land to workers for use at their disposal shall retain only part of their land areas for seed production and trading, build models of application and transfer of technical advances to local farmers; the remaining land areas shall be recovered by local administrations according to the provisions of land legislation for assignment or lease to organizations and individuals for use for other purposes with higher efficiency.

4. Farms which are poorly managed, do business at a loss for three consecutive years or have their existing incomes coming mainly from the lease of land shall be dissolved.

5. Farms shall be retained or established in deep-lying, remote, border areas and islands where large numbers of ethnic minority people are inhabited and there are needs to serve sedentarization, security and defense. These farms shall manage only an appropriate portion of land for seed production, building of models of application and transfer of techniques and construction of processing establishments to serve local people; closely combine socio-economic development tasks with security and defense ones.

Article 5.- Operation mechanism of State-owned farms

1. State-owned farms with 100% State capital and operating under the State Enterprise Law, after being transformed into joint-stock companies, shall operate under the Enterprise Law.

2. For State-owned farms performing public-utility tasks, their products and/or services shall be produced/provided under orders placed or plans assigned by the State or bid at the prices or charges prescribed by the State.

3. State-owned farms which conduct production and business activities while still having to perform the social, security and defense function in deep-lying, remote or border areas, strategic defense areas or areas with extremely difficult socio-economic conditions shall enjoy appropriate policies prescribed by the Prime Minister.

Chapter III

SOLUTIONS

Article 6.- Regarding land

1. State-owned farms shall review and declare by themselves their land use, report to the People's Committees of the provinces or centrally-run cities where their land is located and to their superior agencies being ministries, ministerial-level agencies, Government-attached agencies or State corporations on the contents guided by the Natural Resources and Environment Ministry.

2. The provincial/municipal People's Committees shall assume the prime responsibility for, and coordinate with the ministries, ministerial-level agencies, Government-attached agencies or State corporations in, directing State-owned farms to formulate or adjust the detailed plannings on the use of land areas being managed and used by the farms in their localities in line with the approved local land use plannings and plans, the branch development plannings, the local socio-economic development plannings and plans, the schemes on arrangement, renewal and development of State-owned farms, and on the basis of the results of the reviews of State-owned farms' land funds.

The detailed land use plannings must clearly state land areas of each category to be retained for use, land use plans, land use terms and land areas transferred to localities.

3. The provincial/municipal People's Committees shall approve the detailed land use plannings of State-owned farms in their respective localities.

4. On the basis of the local schemes on arrangement, renewal and development of State-owned farms already approved by the Prime Minister, the provincial/municipal People's Committees shall assign and lease land to State-owned farms.

5. Forms of land assignment and lease:

a/ The State shall assign land without collecting land use levy to State-owned farms prescribed in Clauses 2 and 3, Article 5 of this Decree.

b/ The State shall lease land or assign land with the collection of land use levy to State-owned farms performing production and business tasks.

6. For land areas already contracted to workers' households and laborers, if properly performing the contracts and using land for the right purposes, the contracting households shall be allowed to continue using such land under the signed contracts with adjustments and/or supplements suitable to the farms' land management responsibilities. For land areas contracted to the contracting persons for use at their disposal (land leasing in substance), they shall be recovered according to procedures for assignment or lease according to the provisions of land legislation.

7. For farms' land areas which have been encroached upon, involved in disputes or violations, the provincial/municipal People's Committees shall direct the definitive settlement of each specific case according to law provisions.

8. The provincial/municipal People's Committees shall direct the delimitation of specific boundaries and placing of boundary markers for land use, perform measurements, compile cadastral dossiers and grant land use right certificates to land-using State-owned farms.

9. The provincial/municipal People's Committees shall recover land areas which farms do not use or are using for wrong purposes or inefficiently, land areas which have been leased, transferred or lent; land areas on which tree gardens have been sold; land areas of dissolved farms; land areas which must be adjusted because the production and business tasks are narrowed with competent authorities' approval for management and use according to the provisions of land legislation.

State-owned farms must hand all dossiers of the recovered land funds to the People's Committees of the provinces or centrally-run cities where exist such land funds.

10. Recovered land areas shall be assigned or leased according to the following provisions:

a/ To prioritize the assignment of land to households and individuals who are officials, employees and workers of the farms with land recovered but now cease to work for such farms or those of the dissolved farms, for use for agricultural production, salt making or aquaculture.

b/ To prioritize the assignment of land to ethnic minority people and peasants' households who are living in the localities but have no or insufficient land for production.

The land assignment terms and the limits of agricultural land assigned to the subjects prescribed at Points a and b of this Clause shall comply with current provisions of land legislation.

c/ Land areas already contracted by State-owned farms to households and individuals shall be assigned or leased to such households and individuals. The assigned land limits shall comply with current provisions of land legislation. The land assignment term shall start from the date of contracting.

d/ To continue leasing land areas which are being leased to organizations, households and individuals. The land use term shall start from the date of leasing.

e/ Land areas which farms have used for joint ventures or partnerships with other economic sectors shall be assigned with the collection of land use levy or leased to the joint venture parties or partners. The land use term shall start from the date of contract signing.

f/ Agricultural land areas on which tree gardens have been sold or land areas on which stables have been erected but the cattle herds have been sold shall be leased to organizations, households or individuals that have bought the tree gardens or cattle herds. The land use term shall start from the date of purchase of tree gardens or stables and cattle herds.

g/ The remaining land areas, after being assigned or leased in the cases specified at Points a, b, c, d, e and f of this Clause, shall be assigned or leased to other subjects in accordance with the approved local land use plannings and plans.

h/ Organizations, households and individuals that use land prescribed in this Article shall be granted the land use right certificates after they complete land assignment or lease procedures and fulfil the financial obligations prescribed by law.

11. Residential land shall be assigned to the People's Committees of rural districts, urban districts, towns and provincial cities where exists such land for management; where the users use such land in line with the approved land use plannings and plans, they shall be granted the land use right certificates and must fulfil the financial obligations prescribed by law.

Article 7.- Regarding capital, assets and finance

1. State-owned farms shall have to inventory, classify and determine all types of their existing capital, assets and liabilities; make financial statements up to the time of arrangement and renewal.

2. State-owned farms which are rearranged, dissolved or undergo ownership transformation under the plans approved by competent authorities shall have their outstanding financial, asset and liability problems considered and settled like State enterprises.

3. State-owned farms shall hand over their assets, including roads, irrigation works, school buildings, health stations which they have built with their investment, are managing and using in service of local public demands, to the provincial/municipal People's Committees or authorized units for management and use; hand over the electric systems which they manage and use to Vietnam Electricity Corporation for management. These assets, both assets and capital, shall be handed over in their present conditions according to the accounting books' figures at the time of hand-over. This work must be completed before December 31, 2004.

4. The Finance Ministry shall give specific guidance on the financial mechanism for the hand-over between farms and the involved parties.

5. Farms may retain the proceeds from the sale of tree gardens, planted forests, cattle herds and basic depreciation amounts for investing in intensive cultivation, garden re-planting, equipment procurement, technology renovation and infrastructure building according to the plannings and plans approved by competent authorities.

6. For farms located in deep-lying, remote or border areas, islands, strategic defense regions or areas with extreme socio-economic difficulties, they shall implement their infrastructure investment, maintenance and repair plans with State budget funds.

7. Factories and processing establishments shall be equitized according to current provisions of equitization legislation. Farms shall have their tree gardens associated with processing establishments equitized on a pilot basis. Preferential shares shall be sold to raw-material producers.

Article 8.- Labor policy

1. State-owned farms shall review the numbers of their existing officials, employees and laborers by the time of arrangement and renewal; make plans on arrangement of these officials, employees and laborers along the direction of providing them with jobs suitable to their abilities and strengths, then report such plans to competent bodies.

2. In the process of rearranging and reorganizing the production at State-owned farms, laborers who cannot be arranged into any jobs shall be entitled to the regimes prescribed in the Government's Decree No. 41/2002/ND-CP of April 11, 2002 and Decree No. 155/2004/ND-CP of August 11, 2004 on policies towards laborers who are left redundant as a result of rearrangement of State enterprises.

3. For laborers who have been assigned land of State-owned farms on a contractual basis, if the employer-employee labor relations are terminated, they shall not be entitled to the regimes prescribed in the Government's Decree No. 41/2002/ND-CP of April 11, 2002 and Decree No. 155/2004/ND-CP of August 11, 2004 but be provided with severance allowances prescribed in Article 42 of the Labor Code.

4. Officials who are directors, deputy directors, chief accountants and Managing Board members (if any) but are left redundant as a result of organizational rearrangement shall enjoy policies prescribed in the Government's Resolution No. 09/2003/NQ-CP of July 28, 2003 amending and supplementing the Government's Resolution No. 16/2000/NQ-CP of October 18, 2000 on streamlining payrolls in administrative agencies and non-business units. Payment sources shall come from the Redundant Labor Arrangement Support Fund according to the Government's Decree No. 41/2002/ND-CP of April 11, 2002 and Decree No. 155/2004/ND-CP of August 11, 2004.

5. Officials and workers who have received on a contractual basis production land, tree gardens or animal herds and now reach the retirement age shall be allowed to continue performing the contracts till the expiry of the contractual term. Upon the expiry of the contractual term, they shall be given priority to renew the contracts if they so wish.

6. For officials and employees who have received land, tree gardens or cattle herds of their farms on a contractual basis and got paid according to incomes from production results through the contracted land, tree gardens or cattle herds, all regulations on labor contracts must be complied with; wages, social insurance, medical insurance, labor protection amounts shall be included in production costs and expressed in the contracts.

7. For laborers who have received contracts but still enjoy rank- or position-based salaries, their contractual jobs must be expressed in the labor contracts according to current regulations. If their wages are included in the contracted results, the form of wage payment must be clearly stated in the labor contracts.

8. For laborers who are working at farms' establishments, when such establishments are handed over to localities for management under Clause 3, Article 7 of this Decree, localities shall have to receive such laborers, arrange jobs and provide benefits for them according to current regulations.

Article 9.- Regarding science and technology

1. State-owned farms shall step up the application of new scientific advances, technologies and high-technologies to production, processing and post-harvest product preservation.

2. Different forms of cooperation and partnership between State-owned farms and central, regional and/or local scientific research institutes, schools, centers and establishments shall be implemented to protect gene sources, select, cross-breed, and produce high-yield and -quality plant and animal varieties which are highly competitive in the market.

3. Farms must become centers for transfer and application of scientific and technological advances, provision of agricultural and forestry promotion services, and market information for their workers as well as local farmers; the State shall partially finance the performance of these tasks with the annual agricultural promotion funding sources of ministries and localities.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 10.- Responsibilities of ministries and branches

1. The Agriculture and Rural Development Ministry shall assume the prime responsibility for, and coordinate with the Finance Ministry, the Natural Resources and Environment Ministry, the Home Affairs Ministry, the Labor, War Invalids and Social Affairs Ministry and concerned ministries in, guiding the implementation of this Decree.

2. The Natural Resources and Environment Ministry shall assume the prime responsibility for, and coordinate with the concerned ministries and branches in, guiding the land review, planning, management and use by State-owned farms.

3. The Finance Ministry shall assume the prime responsibility for, and coordinate with Vietnam State Bank, the Agriculture and Rural Development Ministry, the Planning and Investment Ministry and provincial/municipal People's Committees in, guiding the management and use of capital, assets, finance, related policies and regimes as well as funding sources to support the arrangement and renewal of State-owned farms.

4. The Agriculture and Rural Development Ministry shall evaluate the schemes on arrangement and renewal of State-owned farms of localities and corporations and submit them to the Prime Minister for approval.

5. The Defense Ministry and the Public Security Ministry shall evaluate the schemes on arrangement, renewal and development of State-owned farms, corporations under their management and submit them to the Prime Minister for approval.

6. The Enterprise Renewal, Arrangement and Development Boards of the ministries and localities shall perform the task of arranging, renewing and developing State-owned farms of the ministries and provincial/municipal People's Committees.

Article 11.- Responsibilities of provincial/municipal People's Committees

1. To formulate schemes on farm arrangement, renewal and development and submit them to the Prime Minister for approval before June 2005 and direct the implementation thereof.

2. On the basis of land review and readjustment results, to determine land boundaries and issue decisions to assign or lease land and grant land use right certificates to farms.

3. To direct professional branches to guide and examine State-owned farms in formulating land use plannings and farm renewal and arrangement plans.

Article 12.- Responsibilities of State corporations

1. To formulate schemes on rearrangement of existing State-owned farms and submit them to the Prime Minister for approval (for corporations 91); submit to the concerned ministries for consideration and submission to the Prime Minister for approval (for corporations 90) before June 2005. Such schemes must be consented by the provincial/municipal People's Committees. For corporations managed by the provinces or centrally-run cities, they should submit their schemes to the provincial/municipal People's Committees for further submission to the Prime Minister for approval.

2. To coordinate with the provincial/municipal People's Committees in reviewing land funds which they are managing and using, and formulate or adjust the farms' land use plannings then submit them to the provincial/municipal People's Committees for approval.

3. To direct farms to arrange, renew and develop themselves according to the approved plans.

Article 13.- Responsibilities of State-owned farms

1. To review land funds they are managing and using and formulate or adjust their land use plannings, then submit them to the provincial/municipal People's Committees for approval.

2. To make reports on their production and business over the years, on their profits and losses, labor, assets, supplies, capital and management; production and business plans and renewal plans, then submit them to competent authorities for approval.

3. To implement their arrangement and renewal plans after they are approved.

Chapter V

IMPLEMENTATION PROVISIONS

Article 14.- Implementation effect and responsibilities

1. This Decree takes effect 15 days after its publication in the Official Gazette.

2. All previous regulations contrary to this Decree are hereby annulled.

3. The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies, the presidents of the provincial/municipal People's Committees shall have to implement this Decree.

On behalf of the Government

Prime Minister
PHAN VAN KHAI